Government budgeting in India

The Annual Financial Statement or the Statement of estimated receipts and expenditure of the Government of India with respect to each financial year is popularly known as the Budget. Budget is presented in the house in two parts namely Railway Budget relating to the Railway finance, which is presented by the Railway Minister in the third week of February at 1200 hours and General Budget, which gives an overview of the financial position of the Government of India and is presented by the Finance Minister on the last working day of February at 11 AM

The medium term fiscal policy statement, the fiscal policy strategy statement and the macro economic framework statement are simultaneously laid on the table of Rajya Sabha. In an election year, the Budgets may be presented twice—first to secure a Vote on Account for a few months and later in full.

In case of Railway Budget, the sets are distributed to members from the publications counter after the Railway Minister concludes his speech. The sets of the General Budget are distributed to members from several booths in the inner and outer lobbies arranged according to the division numbers of members. In case division numbers have not been allotted, these booths are arranged state-wise.

The Budget papers are made available to the members after the Finance Minister’s speech is over, the Finance Bill has been introduced and the House has adjourned for the day, according to Indian economy by Dutt and Sundaram. There will not be any discussion on the Budget on the day it is presented to the house. Both the Budgets are discussed in two stages; general discussion and detailed discussion, which follows demands for grants and appropriation of finance bills. The whole process has to be completed in a specified time.

After the presentation of the Budget, the Minister of Parliamentary Affairs holds a meeting with different sections of the parliament to discuss their demands for grants. Once the decisions are arrived at, the ministry forwards the considerations to the Business Advisory Committee, which considers the proposals, allots time and recommends the order in which the demands may be discussed. It is generally left to the Government to make any changes in the order of discussion.

During general discussion, the house is at liberty to discuss the Budget as a whole or any question of principles involved therein but no motion can be moved.

There are three kinds of Cut motions to reduce the number of demands for grants

(i) Disapproval of Policy Cut

(ii) Economy Cut

(iii)Token Cut

Disapproval of Policy Cut: A cut motion that says “The amount of the demand be reduced to Re. 1” implies that the mover disapproves of the policy underlying the demand. The member giving notice of such a Cut Motion has to indicate in precise terms the particulars of the policy which he proposes to discuss. Discussion is confined to the specific point (or points) mentioned in the notice and it is open to the member to advocate an alternate policy.

Economy Cut: Where the object of the motion is to effect the economy in the expenditure, the form of the motion is “The amount of the demand be reduced by Rs...(a specified amount)”. The amount suggested for reduction may either be a lump-sum reduction in the demand or omission or reduction of an item in the demand.

Token Cut: Where the object of the motion is to ventilate a specific grievance within the sphere of responsibility of the Government of India, its form is: “That the amount of the demand be reduced by Rs. 100”. Discussion on such a cut motion is confined to the particular grievance specified in the motion which is within the sphere of responsibility of the Government of India.

After the presentation of the Budget, notices of cut motions can be tabled up to 15.15 hours on a day, which are printed and circulated before the day the relevant demands for grants to which they relate are to be taken up in the House. Any notifications after the time are deemed to be printed and circulated in the next working day if the demands for grants to which they relate have not already been disposed of in the House.

Cut motions to be admissible should satisfy certain conditions. It should relate to one demand, be clearly expressed and not contain arguments, inferences, ironical expressions, imputations, epithets and defamatory statements. It should be confined to one specific matter stated in precise terms. It should not reflect on the character or conduct of any person, whose conduct can only be challenged on a substantive motion.

It should not make suggestions for the amendment or repeal of existing laws. It should not relate to a State subject or to matters which are not primarily the concern of the Government of India. It should not relate to expenditure ‘Charged’ on the Consolidated Fund of India, It should not relate to a matter which is under adjudication by a court of law having jurisdiction in any part of India. It should not raise a question of privilege.

It should not revive discussion on a matter which has been discussed in the samesession and on which decision has been taken. It should not anticipate a matter which has been previously appointed for consideration in the same session. It cannot raise a discussion on any matter which is pending before any tribunal or statutory authority. Although the Speaker may allow such discussions on his discretion to allow such matter being raised in the House as is concerned with the procedure or stage of enquiry, if the Speaker is satisfied that it is not likely to prejudice the consideration of such matter by the statutory tribunal, statutoryauthority, commission or court of enquiry

Ruling party members do not table cut motions. Admitted demands of grants are circulated to members generally two days in advance of the date on which the demands for grants in respect of the Ministry are to be taken up in the House for discussion. The publication Indian Economy by Dutt and Sundaram says, “Since the whole process of Budget starting with presentation and ending with discussion and voting of demands for grants and passing of Appropriation Bill and Finance Bill generally goes beyond the current financial year, a provision has been made in the Constitution empowering the LokSabha to make any grant in advance through a vote on account to enable the Government to carry on until the voting of demands for grants and the passing of the Appropriation Bill and Finance Bill”.

The vote on account is taken for two months i.e. equivalent to one sixth of the estimated expenditure for the entire year under various demands for grants. But if it is an election year, the vote on account may be taken for a longer period (around three to four months) if it is anticipated that the main demands and the Appropriation Bill will take longer than two months to be passed by the House.

Vote on Account is passed by Lok Sabha after the general discussion on the Budget (General and Railway) is over and before the discussion on demands for grants is taken up.

Appropriation Bill

Once the demand of grants has been passed, a bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet the grants and the expenditure charged on the Consolidated Fund of India is introduced, considered and passed. The introduction of such a Bill cannot be opposed. The scope of discussion is limited to matters of public importance or administrative policy implied in the grants covered by the Bill and which have not already been raised during the discussion on demands for grants.

The Speaker may require members desiring to take part in the discussion to give advance intimation of the specific points they intend to raise and may withhold permission for raising such points as in his opinion appear to be repetition of the matters discussed on a demand for grant. Such advance intimation must be given before 10.00 hours on the day the Appropriation Bill is to be taken into consideration. No action is taken on intimations received after 10.00 hours, The procedure in respect of an Appropriation Bill is the same as in respect of other Money Bills.

Finance Bill

Finance Bill is an ordinary bill which is introduced every year to give effect to the financial proposals of the Government of India for the next following financial year and includes a Bill to give effect to supplementary financial proposals for any period. It is introduced immediately after the presentation of the Budget and cannot be opposed.

Both the Appropriation bill and the Finance bill can be introduced without prior circulation of copies to members. It usually contains a declaration under the Provisional Collection of Taxes Act, 1931, by which the declared provisions of the bill relating to imposition or increase in duties of customs or excise come into force immediately on the expiry of the day on which the Bill is introduced.

In view of such provisions and the provision of Act of 1931, the Finance Bill has to be passed by Parliament and assented to by the President before the expiry of the seventy-fifth day after the day on which it was introduced. Finance bill can be passed by Loksabha only .The procedure in respect of Finance Bill is the same as in the case of other Money Bills.

Budgets of Union Territories and States under President’s Rule

Budgets of Union territories and States under the President’s Rule are also presented to the LokSabha. The procedure in regard to the Budget of the Union Government is followed in such cases with such variations or modifications, as the Speaker may make.